DAX 30 Is Testing Major Support And May Reach 9400 On a Bearish Break
The DAX 30 is once again testing the lower end of its 9563 to 9945 range. The latest round of weakness was triggered by a slide in crude oil prices, which are weighing heavily on stock markets across Europe.
At this stage, crude oil (FXCM: USOIL) may slide lower as the trend is bearish below $32.15 and price appears to be heading to the January 27 low of $30.15, and then potentially the January 26 low of $29.24 in case of an extension.
This may trigger a break to the DAX’s lower limit of 9563, which opens the door for a decline to the psychological level of 9500 and then 9400. This is an opportunity for bearish traders.
As the index is trading close to support this also offers a good risk/reward ratio for range traders and traders expecting stable crude oil prices, and for a positive effect on the back of the rate cut by the Bank of Japan (BoJ) last week and the ECB potentially reducing their interest rates in the months ahead. These traders can expect the lower limit to hold and for the DAX to reach the other end of the range at 9563 over the coming weeks.
Losing Money Trading? This Might Be Why
DAX 30 | FXCM: GER30
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
Contact and follow Alejandro on Twitter: @AlexFX00
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